Do I pay CMHC insurance in cash at closing?

No, the premium is added to your mortgage and paid off over time. But the 8% Ontario PST on that premium is due in cash at closing.

Can I avoid CMHC insurance in Ottawa?

Yes, by putting at least 20% down. Below that, default insurance is required on any federally regulated mortgage.

Is CMHC insurance the same as life or disability insurance on a mortgage?

No. It protects the lender if you default — it won't pay off your mortgage if you die or become disabled. That's separate, often optional, coverage.

How much is CMHC PST on a typical Ottawa home?

Usually $1,000–$2,000 in cash at closing, depending on your price and down payment. Budget around $1,800 on a $600,000 purchase with 5% down.

Are CMHC, Sagen, and Canada Guaranty premiums different?

Practically no — all three use the same tiers and rates. Your lender chooses the insurer, not you.

Can I get an insured mortgage on a rental property in Ottawa?

No. All three insurers cover owner-occupied homes only. Investment properties need at least 20% down.

House keys and mortgage paperwork on a desk

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Ottawa First-Time Buyer Cluster

What CMHC Insurance Actually Costs Ottawa Buyers

By Bo Yu, Broker, Right at Home Realty, Brokerage

If you're buying with less than 20% down, your mortgage will almost certainly need default insurance from CMHC, Sagen, or Canada Guaranty. This is insurance that protects the lender, not you — and it comes with one detail that catches people off guard: the premium gets added to your mortgage, but the 8% Ontario PST on that premium is due in cash at closing.

Most first-time buyers aren't sure how the premium is calculated, what it does to their monthly payment, or how it works alongside the federal 30-year amortization rules.

Here's what the insurance is, what it costs at each down-payment level, how to budget for the PST, and when it makes more sense to save longer instead.

Prices, rates, and program rules change often. Treat the figures here as general guidance, not advice for your specific situation. Ask Bo for current OREB comparables, and confirm program eligibility with your lender or lawyer.

What this insurance is for

It protects the lender if you stop making payments and the home sells for less than what's owed on the mortgage. It doesn't protect you, and it's required by law on any federally regulated mortgage with less than 20% down.

Three companies offer it in Canada: CMHC (a Crown corporation), Sagen, and Canada Guaranty. Rates and rules are nearly identical between them — your lender picks which one to use, and it rarely matters which.

Laptop with real estate listings and mortgage paperwork on a kitchen table — Planning a purchase, mortgage and closing from the kitchen table.

What the premium costs by down payment

The premium is a percentage of your mortgage amount, and it scales with your loan-to-value ratio (LTV) — basically, how much of the home's value you're borrowing:

5% down (95% LTV): 4.00% premium
10% down (90% LTV): 3.10% premium
15% down (85% LTV): 2.80% premium
20%+ down: no insurance required

A worked example: $600,000 with 5% down

Purchase price: $600,000. Down payment: $30,000 (5%). Base mortgage: $570,000. CMHC premium at 4.00%: $22,800. Total insured mortgage: $592,800.

Ontario PST on that premium (8% of $22,800): $1,824, due in cash at closing.

The premium itself isn't paid in cash — it's rolled into the mortgage and paid off over time. It does bump up your monthly payment, though.

Young family at the front door of their new Ottawa home — First-time buyers stepping into their Ottawa home.

How this fits with 30-year amortization

Federal rules now allow a 30-year amortization on insured mortgages for first-time buyers, and on all new-construction purchases. That lowers your monthly payment, though you pay more interest over the life of the loan.

For a lot of Ottawa first-time buyers, this 30-year option is what makes an entry-level home in Kanata, Barrhaven, or Orléans actually reachable.

The rules you need to qualify

Insured mortgages top out at a $1.5M purchase price (raised from $1M in December 2024). Above that, you need 20% down since insurance isn't available.

Every insured mortgage has to pass the federal stress test: you need to qualify at whichever is higher, your contract rate plus 2%, or 5.25%.

The home also has to be owner-occupied — investment properties can't be insured and need at least 20% down.

Row of modern detached suburban homes in west Ottawa — Family-friendly suburbs like Kanata, Barrhaven and Stittsville.

How the premium actually gets paid

1. You apply for a mortgage with less than 20% down. 2. Your lender submits your file to CMHC, Sagen, or Canada Guaranty. 3. The insurer approves it and quotes the premium. 4. The premium is added to your mortgage principal at closing — no cheque required for that part. 5. The 8% Ontario PST on the premium is due in cash at closing, through your lawyer.

Is it worth paying?

For most first-time buyers, yes. The premium is usually smaller than the cost of waiting two or three more years to save 20%, while Ottawa prices typically climb 3–5% a year. Adding $22,800 to your mortgage to get in two years sooner usually pays off over a five-year horizon.

If you're already close to 20% saved, the calculation flips, and it often makes more sense to close that last gap and skip the premium.

Questions People Ask

A few common questions

Do I pay CMHC insurance in cash at closing?: No, the premium is added to your mortgage and paid off over time. But the 8% Ontario PST on that premium is due in cash at closing.
Can I avoid CMHC insurance in Ottawa?: Yes, by putting at least 20% down. Below that, default insurance is required on any federally regulated mortgage.
Is CMHC insurance the same as life or disability insurance on a mortgage?: No. It protects the lender if you default — it won't pay off your mortgage if you die or become disabled. That's separate, often optional, coverage.
How much is CMHC PST on a typical Ottawa home?: Usually $1,000–$2,000 in cash at closing, depending on your price and down payment. Budget around $1,800 on a $600,000 purchase with 5% down.
Are CMHC, Sagen, and Canada Guaranty premiums different?: Practically no — all three use the same tiers and rates. Your lender chooses the insurer, not you.
Can I get an insured mortgage on a rental property in Ottawa?: No. All three insurers cover owner-occupied homes only. Investment properties need at least 20% down.

Keep Reading

First-Time Home Buyer Ottawa

The complete first-time buyer playbook.

Down Payment Guide Ottawa

How much to save at each Ottawa price band.

Mortgage Pre-Approval Guide

Lock a rate and confirm your budget.

Ottawa Closing Costs Guide

Where CMHC PST fits in your closing-day cash.

FHSA Ottawa Guide

Tax-free down-payment savings.

Ottawa Mortgage Guide (pillar)

Rates, fixed vs. variable, broker vs. bank.

Straight From the Source

Check the numbers yourself

These are the official sources I use for current Ottawa real estate data, government programs and buyer protection.

Want to see the exact numbers for your purchase?

Send me your target price and down payment and I'll show you exactly what the premium adds to your mortgage, and what cash you'll need at closing.

Get a CMHC premium estimate

Any prices, rates, market figures or value estimates on this page are for general information only, based on the assumptions shown, and are not legal, tax, mortgage or financial advice or an offer of credit. Actual rates, payments, taxes, fees and values vary — confirm the numbers with your lender, lawyer or accountant before relying on them. Full disclosures.

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